Week 3 Assignment 1: Whistleblowing and Sarbanes-Oxley
Shirmere N. Gardner
Dr. Susan Gerber
LEG 500: Law, Ethics & Corporate Governance
January 25, 2015

Abstract
This text will examine the key characteristics of a whistleblower, as well as the details surrounding the JPMorgan whistleblowing event. The extent to which whistleblowers are protected under the Sarbanes-Oxley Act (SOX) will also be elaborated.

Key Characteristics of a Whistleblower Whistleblowers are individuals who choose to report unethical and illegal activities. Some may work for various organizations such as non-profits and government agencies. Whistleblowing empowers employees to adhere to ethical principles and speak up for things taking place that are unethical, which may affect consumers, citizens or other employees. Such information may be disclosed to company officials, government authorities, and the media. Some of the key characteristics of a whistleblower are that they are altruistically motivated, utilitarian, uninterested in altering their behavior and they allow their own attitudes and beliefs to guide them. Most whistleblowers are often well-educated and hold professional positions (Wines, 2005).
JP Morgan Whistleblower According to a Reuters article a JPMorgan whistleblower was compensated $63.9 million in a mortgage fraud deal. “Keith Edwards, a Louisiana resident, had worked for JP Morgan or its predecessors from 2003 to 2008, and had been an assistant vice president supervising a government insuring unit” (Stempel, 2014). Edwards originally sued JPMorgan in 2013 under the False Claims Act, which allows individuals to be able to sue government contractors and suppliers for allegedly defrauding taxpayers. The U.S. Department of Justice also joined as a plaintiff in this case. JPMorgan actually admitted that “for more than a decade, the company submitted thousands of mortgages for insurance by the Federal Housing Administration or the Department of Veterans Affairs that did not qualify for government guarantees” (Stempel, 2014). In addition, JPMorgan admitted that it had failed to tell the agencies that its own internal reviews had turned up problems. The government ultimately has to cover millions of dollars of losses after some of the bank loans went sour, which resulted in evictions and foreclosures nationwide. Approximately, “$56.5 million of Edwards’ reward concerns the FHA portion of the case, and $7.4 million concerns the VA portion” (Stempel, 2014). There were no personal effects to Edwards as a result of his actions because he was no longer employed with JPMorgan at the time he filed the incident.
Whistleblower Justification Edwards was justified in his actions in that not only did he file the incident, but he was also supported by the U.S. Department of Justice. Whistleblowers can recover portions of False Claims Act settlements, which often grow when government agencies become involved. In blowing the whistle, he was awarded $63.9 million. In my opinion, having the U.S. Department of Justice involved aided in the reward and also helped to solidify his claim.
Protection under the Sarbanes-Oxley Act (SOX) The Sarbanes-Oxley Act protect employees from retaliation as a result of whistleblowing. According to OSHA, an employer covered under SOX may not discharge or in any manner retaliate against employees because he or she filed, caused to be filed, participated in or assisted in a proceeding relating to alleged unethical behavior. An employer has violated SOX if the employee’s protected activity was a contributing factor in an employer’s decision to take unfavorable employment action against the employee. Such actions may include, firing, demoting, disciplining, intimidating, threatening, pay reduction, etc. Edwards was no longer employed by JPMorgan at the time he filed the complaint, therefore, he was not in jeopardy of being disciplined by the company.
Conclusion
When companies decide to behave in an unethical manner, they set themselves up to potentially be exposed. It pays to be fair and honest in all aspects of life. The Sarbanes-Oxley Act protects those individuals who are bold enough to stand up for what’s right and promote fairness and ethical behavior across the board. There may also be a reward for being that person.

References
Halbert, T., & Ingulli, E. (2012). Law And Ethics In The Business Environment. Seventh Edition. Mason, Ohio: Cengage Learning
OSHA Fact Sheet. www.osha.gov[->0]. Filing Whistleblower Complaints under the Sarbanes-Oxley Act. Retrieved January 7, 2015, from http://www.osha.gov
Stempel, Jonathan. (2014 March 7). JPMorgan whistleblower gets $63.9 million in mortgage fraud deal. www.reuters.com. Retrieved January 7, 2015, from http://www.reuters.com/article/2014/03/07/us-jpmorgan-whistleblower-idUSBREA261HM...
Wines, Lisa. (2005). Whistleblowing. www.shsu.edu[->1]. Retrieved January 20, 2015, from http://www.shsu.edu/piic/fall2005/presentations/Whistleblowing.ppt

[->0] - http://www.osha.gov
[->1] - http://www.shsu.edu